US job creation in 2025 slows to weakest since Covid

The number of jobs created in the US grew only modestly in December, as a weak year for the employment market in the world’s largest economy drew to a close.

Employers added 50,000 jobs in the final month of 2025, according to Labor Department data, which was fewer than expected. But the unemployment rate dipped to 4.4%.

Job gains last year were the smallest since 2020, when the Covid pandemic led to widespread cuts.

Businesses have been operating in an environment marked by US President Donald Trump’s dramatic policy changes, including tariffs, an immigration crackdown and cuts to government spending.

The US economy has held up in the face of these shifts, growing at an annual rate of 4.3% over the three months to September.

But the expansion – driven by steady consumer spending and a growth in exports – has not been accompanied by significant job creation.

On average, the US added just 49,000 roles per month in 2025, down from an estimated gain of two million a month the year before.

The Labor Department said the US also added 76,000 fewer new positions in October and November than previously estimated.

Retailers and manufacturers were among the sectors reporting losses last month, which were offset by hiring at health care employers, bars and restaurants.

The data underscores the mixed dynamics facing job-seekers in the US, where hiring has cooled markedly over the last year but fears of mass layoffs have not materialised.

The US Federal Reserve central bank has responded to the slowdown by cutting its key lending rate in hopes of giving the economy a boost, despite concerns that inflation is still bubbling.

But the central bank is divided about how much lower borrowing costs should go.

Analysts said the latest figures – which showed the jobless rate recovering to the 4.4% level where it stood in September – would do little to resolve those debates.

“Today’s report confirms what we think has been evident for some time—the labor market is no longer working in favour of job seekers,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.

But she added: “Until the data provide a clearer direction, a divided Fed is likely to stay that way. Lower rates are likely coming this year, but the markets may have to be patient.”